Current through Vol. 41, No. 13, March 15, 2024
The following procedures shall be used only when conducting transactions using the Federal Reserve Bank as a safekeeping bank. All other transactions shall use the procedures found at 735:10-1-7. Permissible transactions under the rules are: Pledging, Releasing and Substitution of collateral securities. When substituting collateral instruments for collateral securities, follow the procedures in 735:10-1-15.
(1) When pledging collateral securities:
(A) The financial institution (or "pledgor bank") shall:
(i) Complete Pledge Form (OST Form 95-007) in Appendix C of this Chapter.
(ii) Forward Pledge Form to OST.
(iii) Call Federal Reserve Bank and request security be pledged.
(B) The Federal Reserve Bank will then forward written documentation to OST showing the pledge to the State Treasurer.
(C) OST will then:
(i) Review documents, and if approved, execute Pledge Form and attach custody receipt received from Federal Reserve Bank
(ii) Retain form and documentation of the pledge. Forward one (1) copy of form to pledgor bank.
(2) When releasing pledged collateral securities, a pledgor bank will only be allowed to release collateral when there are no longer any State funds on deposit or the current market value of any remaining collateral is equal to or greater than the required amounts established in 735:10-1-3.
(A) The pledgor bank shall:
(i) Complete release part of Pledge Form for collateral to be released.
(ii) Complete Federal Reserve Bank Form, "Request to Release Pledged Securities."
(iii) Forward both forms to OST.
(B) OST shall:
(i) Review documents, and if approved, execute release form.
(ii) Return one (1) copy of completed release to the pledgor bank.
(iii) Return "Request to Release Pledged Securities Form" to Federal Reserve Bank.
(3) For the substitution of collateral securities for other collateral securities, a substitution of collateral may only be made when the current fair market value of the substitute collateral (plus any remaining pledged collateral) is equal to or greater than the maintenance percentage. This process will require a release and new pledge/substitution.
(A) The pledgor bank shall:
(i) Complete the release part of Pledge Form for collateral to be released.
(ii) Complete Federal Reserve Bank form, "Request to Release Pledged Securities."
(iii) Complete new Pledge Form (OST Form 95-007) in Appendix C of this Chapter for collateral being substituted, including the substitution part listing OST's original pledge number for the collateral being released.
(iv) Call Federal Reserve Bank and request security be pledged.
(v) Forward to OST the following:
(I) Release,
(II) Request to Release Pledged Securities form, and
(III) A new Pledge/Substitution Form.
(B) The Federal Reserve shall forward written documentation of substituted pledged collateral to OST showing pledge to the State Treasurer.
(C) OST shall:
(i) Review documents, and if approved, execute release and Pledge/Substitution forms.
(ii) Retain new Pledge/Substitution Form. Forward one (1) copy to pledgor bank.
(iii) Return one (1) copy of release to the pledgor bank.
(iv) Return "Request to Release Pledged Securities" Form to Federal Reserve Bank.
(4) For the substitution of collateral securities for collateral instruments, a substitution may only be made when the current fair market value of the substitute collateral (plus any remaining pledged collateral) is equal to or greater than the maintenance percentage. This process will require a release and new pledge/substitution.
(A) The pledgor bank shall:
(i) Complete the release part of the Pledge Form for the collateral instrument to be released.
(ii) Complete new Pledge Form (OST Form 95-007) in Appendix C of this Chapter for collateral securities being substituted, including the substitution part listing OST's original pledge number for the collateral instrument being released.
(iii) Call Federal Reserve Bank and request security be pledged.
(iv) Forward the Pledge Form with the completed release to OST, along with a new original Pledge Form identifying the collateral securities to be substituted.
(B) The Federal Reserve shall forward written documentation of substituted pledged collateral to OST showing pledge to the State Treasurer.
(C) OST shall:
(i) Review documents, and if approved, execute release and Pledge/Substitution forms.
(ii) Retain new Pledge/Substitution Form. Forward one (1) copy to pledgor bank.
(iii) Return one (1) copy of release to the pledgor bank.
Added at 13 Ok Reg 1583, eff 4-2-96 (emergency); Added at 13 Ok Reg 3341, eff 7-25-96; Amended at 15 Ok Reg 2479, eff 4-29-98 (emergency); Amended at 15 Ok Reg 2865, eff 6-25-98
